The ongoing wave of tech layoffs hits NBN Co, which this month announced it will lay off 500 people as the company adjusts its operating and financing strategies to meet an environment of increasing competition and mounting borrowing pressures.
The company, which has been building and operating the National Broadband Network (NBN) since 2009, will change the “size and shape of the company” by cutting about 10 percent of its workforce, reports said.
Although CEO Stephen Rue was optimistic about the company’s recent half-year results announcement – signaling a growing customer base and continued use of high-speed services that drove half-year revenue to $2.63 billion – he warned in a recent email to staff that the Australian telecommunications “environment is changing” and that the competition NBN faces to win and retain customers is increasing.”
Citing “the continuous improvement of our products and the simplification of our systems”, Rue noted that “a financially stable and sustainable NBN means we can continue our important investment in the network” – even as the staff cuts were announced in a attempt to “simplify” the company and make it “more efficient commercially and operationally”.
“All business units” will be affected, with most of the affected roles being middle and senior management – prompting speculation that the company is a “death spiraland dr. Mark Gregory, RMIT University academic and industry analyst mark the network as “a national disappointment” that is “overpriced and underperforming for what Australia needs.”
But while the layoffs reflect the growing wave of layoffs in the tech industry tech giants have seen thousands of jobs cut, the news isn’t all bad for NBN Co: Despite taking a scythe to management, NBN Co will simultaneously expand its team of field engineers to support the recently announced $2.4 billion national fiber upgrade program.
That program will expand NBN Co’s fiber optic network, with recent announcements marking the expansion beyond 1 million households – including over 660,000 regional properties – how the company works shift question away from its congested fixed wireless broadband and satellite networks, which are facing hazards of the Elon Musk-backed satellite broadband service StarLink.
The layoffs come as NBN Co is reviewing its financial and fundraising strategies in the wake of a Productivity Commission report that warned the former coalition government’s multi-technology mix (MTM) rollout strategy had created so many “unforeseen costs” that the company had “poor prospects” of ever repaying its debts.
Have been turned down by the government in its efforts to raise broadband prices, NBN Co has been looking for other ways to grow its business while streamlining costs.
One recently announced “game changer” Master Developer Agreement with Western Sydney International (Nancy-Bird Walton) Airport, for example, reflects NBN Co’s drive to conquer new markets from infrastructure competitors.
In a time of increasing market uncertainty, NBN Co also relies on its recent renewable investments to secure additional funding – recently leveraging its expanding environmental cachet Certainly $2.1 billion (€1.35 billion) through a European green bond issuance.
“We are excited to see NBN’s sustainability credentials being tested and validated on the global stage by the global investor base,” said Fiona Trigona, NBN Co’s executive general manager group treasurer, noting the company’s efforts to “deploy sustainability in the anchor the company’s activities”.